India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

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FIGURE F.1 <strong>India</strong>: Leading state agricultural production for select commodities (mmt) Punjab Volume Wheat 14.60 Milk 9.17 Cotton 2.68 Haryana Volume Wheat 10.06 Rajasthan Volume Milk 9.38 Coarse Cereals 5.50 Soybeans 0.77 UttarPradesh Volume Sugarcane 133.95 Wheat 25.03 Milk 18.10 Rice 11.12 Pulses 1.98 Fruit <strong>and</strong> Veg. 0.99 (million hectares) Gujarat Volume Cotton 8.79 Maharashtra Volume Sugarcane 78.57 Coarse Cereals 6.14 Cotton 4.62 Soybeans 2.89 Pulses 2.30 Karnataka Volume Coarse Cereals 5.06 MadhyaPradesh Volume Soybeans 4.78 Pulses 3.20 Million Orissa Hectares Fruit <strong>and</strong> Veg. 0.98 AndhraPradesh Volume Rice 11.87 West Bengal Volume Rice 14.75 Fruit <strong>and</strong> Veg. 1.46 (million hectares) TamilNadu Volume Sugarcane 41.12 Source: Government <strong>of</strong> <strong>India</strong>, Ministry <strong>of</strong> Agriculture. Consumption Pulses are an important protein source for low-income households in <strong>India</strong>, <strong>and</strong> consumption was 35–37 percent <strong>of</strong> total world pulse consumption from 2000 to 2003. 16 Essentially, all <strong>India</strong>ns consume pulses, mostly in shelled <strong>and</strong> split form, called daal, 17 or as flour. 18 The four most popular pulses in <strong>India</strong> are desi chickpeas, pigeon peas, mung beans, <strong>and</strong> lentils. 19 Desi chickpeas are eaten throughout <strong>India</strong>, while the other popular pulses are preferred in certain regions. 20 Pulses with lower consumption include green, yellow, <strong>and</strong> den peas. To help meet dem<strong>and</strong>, <strong>India</strong> imports pulses, including yellow peas, green peas, chick peas, <strong>and</strong> lentils from the United States, Australia, <strong>and</strong> Canada. 21 16 FAOSTAT, downloaded May 27, 2009. 17 “Daal” also refers to dishes <strong>India</strong>ns make out <strong>of</strong> pulses which can be in the form <strong>of</strong> soup or a thick paste. 18 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 6; Govindan, <strong>India</strong>: Exporter Guide, October 1, 2007, 5. 19 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 7 (table 1). 20 To see regional preferences for different pulses, see USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 7 (table 1). 21 Industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 28, 2009; industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 29, 2009. F-6
Yellow peas can serve as a low-cost substitute for desi chickpeas <strong>and</strong> other pulses. 22 Green peas, which normally cost more than yellow peas, are used in daal <strong>and</strong> for snack foods. 23 Although income <strong>and</strong> pulse dem<strong>and</strong> are generally positively correlated, per capita pulse consumption fell over the period 1970–2001 despite rising incomes. 24 This decline occurred because <strong>of</strong> reduced production <strong>and</strong> import levels <strong>and</strong> price increases that may have outpaced income growth. 25 This dynamic reflects the high level <strong>of</strong> <strong>India</strong>n food price sensitivity. 26 In response to rising pulse prices, it appears that middle- <strong>and</strong> low-income <strong>India</strong>ns have replaced pulses with lower-priced grains <strong>and</strong> vegetables, not with other proteins. 27 The shift from pulses by higher-income <strong>India</strong>ns, however, is possibly because <strong>of</strong> preference changes in favor <strong>of</strong> previously less-consumed items, such as meat, vegetables, fruit, or dairy. 28 Oilseeds Production <strong>India</strong> is a major global producer <strong>of</strong> oilseeds. The most important oilseed crops in <strong>India</strong> in terms <strong>of</strong> production are soybeans, peanuts, <strong>and</strong> rapeseed/mustard. Approximately 80 percent <strong>of</strong> total oilseed production is processed into oil. With only 24 percent <strong>of</strong> oilseed production in <strong>India</strong> irrigated, the majority <strong>of</strong> oilseed farmers are dependent on monsoon rainfall. As a result, oilseed yields are well below world averages. Major oilseed production—28.1 mmt on 26.5 million ha in MY 2007/08—increased by nearly 20 percent between MY 2003/04 <strong>and</strong> MY 2007/08. The increase in oilseed area was driven by increases for soybeans, which alone during the same period increased by 35 percent. High domestic market prices for soybean, peanut, <strong>and</strong> rapeseed toward the end <strong>of</strong> the period encouraged production <strong>and</strong> increased plantings. 29 Rising feed dem<strong>and</strong>, mainly for poultry production, in the <strong>India</strong>n domestic <strong>and</strong> international markets kept soybean meal prices high. 30 Other oil meals, including peanut <strong>and</strong> rapeseed meals, are also used in feed formulations, although to a lesser extent, <strong>and</strong> experienced similar increased dem<strong>and</strong> <strong>and</strong> firm prices in MY 2007/08. For soybeans, meal is the most important processed product, <strong>and</strong> it is used for poultry feed. Of total soybean production, approximately 85 percent is converted into meal. The <strong>India</strong>n poultry industry consumes about one-third <strong>of</strong> domestic soy meal production while most <strong>of</strong> the rest is exported. 31 Approximately 70 percent <strong>of</strong> domestic soybean production 22 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 7 (table 1); industry <strong>of</strong>ficial, interview by Commission staff, New Delhi, <strong>India</strong>, May 26, 2009. 23 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 7 (table 1); industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 28, 2009; <strong>and</strong> industry <strong>of</strong>ficial, interview by Commission staff, New Delhi, <strong>India</strong>, May 26, 2009. 24 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 6, 22. 25 Ibid., 22. 26 Industry <strong>of</strong>ficial, interview by Commission staff, New Delhi, <strong>India</strong>, May 26, 2009; industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 28, 2009. 27 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 6, 8. 28 Ibid., 8. 29 <strong>India</strong>n government minimum support prices for oilseeds are typically set too low to influence market prices. Aradhey, <strong>India</strong>: Oilseeds; Annual, April 16, 2009, 3. 30 Aradhey, <strong>India</strong>: Oilseeds; Annual, May 19, 2008, 6. 31 Industry representative, interview by Commission staff, Mumbai, <strong>India</strong>, May 28, 2009. F-7
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United States International Trade C
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U.S. International Trade Commission
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Abstract This report describes <str
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TABLE ES.1 India:
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U.S. agricultural products face str
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U.S. Foreign Direct Investment U.S.
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CONTENTS Page Abstract ............
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CONTENTS―Continued Chapter 6 <str
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CONTENTS―Continued Figures 1.1. <
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ACRONYMS AND TERMS AAY Antodaya Ann
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ACRONYMS AND TERMS—Continued RGGV
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TABLE 1.1 India: A
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FIGURE 1.1 India:
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India’s central
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Despite their weak economic pr<stro
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Approach Current India</str
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Bibliography Birner, Regina, Surupt
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World Bank. Agriculture for Develop
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FIGURE 2.1 India:
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TABLE 2.1 India: A
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FIGURE 2.3 India:
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premium); (2) India</strong
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include government export restricti
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TABLE 2.3 India: A
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FIGURE 2.6 India:
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Exports by Major Trading Partner <s
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CHAPTER 3 Domestic Consumption Over
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TABLE 3.2 India: P
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more likely to have been exposed to
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BOX 3.3 Indian Con
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TABLE 3.3 India: T
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are expected to see income growth <
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Food Preferences India</str
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Regional Variation Geographic <stro
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CCC. “Know India
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CHAPTER 4 Indian A
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For most crops, however, In
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The Farm Sector soybeans 29 —but
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Food processing in India</s
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BOX 4.1 The Central Government’s
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BOX 4.2 Does the Minimum Support Pr
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August 3, 2009, New Delhi announced
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known as zamindars, have doubled or
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that the PFA Act was strictly enfor
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———. Bharat Nirman: A Time-Bo
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Organisation for Economic Co-operat
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CHAPTER 5 TARIFFS Overview
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sensitive. They include vegetable f
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wholly milled rice and</str
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The Indian governm
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India also reporte
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Reference Prices Reference prices,
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Landing Fees <stro
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Simulated Effects
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and nuts” by $0.
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5-19 TABLE 5.4 India</stron
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Bibliography Acharya, Keya. “Thor
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Indian Express.com
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CHAPTER 6 Nontariff</strong
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foreign sources. 6 For example, SPS
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BOX 6.1 Milk and M
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BOX 6.2 Wheat—Continued Yet, <str
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perpetuated continuously. The impor
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notices that must be integrated wit
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import corn under the TRQ is too bu
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Customs Procedures India</s
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Corruption Interests within <strong
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TABLE 6.2 India: E
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Bibliography American Apparel <stro
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Mattson, Jeremy W., Won, W. Koo, <s
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———. 2009 National Trade Esti
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TABLE 7.1 India: C
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First Point of Sal
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Private mandis Som
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approximately 65 million households
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7-10 TABLE 7.2 India</stron
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poor communications infrastructure
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limited popularity with farmers bec
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The lack of infras
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found that 39 percent of</s
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Bibliography Banerjee, A. Dairying
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Tiwari, Shri Rajendra Kumar. “Pos
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FDI Regulations and</strong
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TABLE 8.2 India: A
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Food Processing and</strong
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There is not necessarily a strong l
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For processing of
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BOX 8.3 Restrictions on Foreign Joi
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Under certain circumstances, FDI ca
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commenced. States tend to be quick
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Bibliography Bahn, Niti, an
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International Center for Alcohol Po
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Structure of the <
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BOX 9.1 The UPOV System for Plant V
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that the public sector in I
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Whether this situation will soon ch
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Page 205: APPENDIX A REQUEST LETTER
Page 208 and 209: The Honorable Sham L. Arano
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Page 219 and 220: Summary of Views <
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Page 225 and 226: to U.S. exports to India</s
Page 227 and 228: transparent sanitary regulations th
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Page 233: APPENDIX E POTENTIAL FOR U.S. AGRIC
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Page 250 and 251: is in nonirrigated areas with yield
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Page 265: APPENDIX G UNION AND STATE/UNION TE
Page 268 and 269: certain agricultural goods in the p
Page 270 and 271: Bibliography Chaulan, Shri U.K. “
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Page 277 and 278: Applied ad valorem tariff equivalen
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Page 283 and 284: Bibliography Anderson, Kym, Mariann
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